General Motors Co. GM 3.05%
set a 2035 target for phasing out gasoline and diesel vehicles from their showrooms worldwide, among the first major car manufacturers to set a timetable for the transition to a fully electric line.
GM’s goal, released in a social media post on Thursday by Chief Executive Mary Barra, would mark a marked transition from its current business model. Vehicles that run on fossil fuels and emit pollution account for about 98% of GM’s sales today and all of its profits. The large pickup trucks and sport utility vehicles that are the company’s biggest moneymakers are also among its lowest-consumption vehicles.
The country’s biggest carmaker in sales has called the 2035 date to eliminate all exhaust pollution as an aspiration. Even so, many governments around the world, from California to Japan and the United Kingdom, have pledged to ban cars running on gasoline and diesel until then.
GM had previously said it expects its own portfolio and the broader automotive market to become fully electric in the future, but company executives have not discussed a deadline.
The automaker is placing one of the automotive industry’s biggest bets on electric vehicles. In November, she said she would increase her investment in plug-in vehicles, as well as driverless car technology, by a third over previous plans, to $ 27 billion in the middle of the decade. This represents more than half of its planned investments during that period, the company said.
GM also said on Thursday that it intends to be carbon neutral by 2040, which would mean eliminating carbon emissions from all of its operations, as well as from the vehicles it makes and sells. About three-quarters of GM’s carbon production comes from the emissions produced by the cars and trucks it puts on the roads.
GM’s shares rose sharply after its declaration, rising about 4% in Thursday’s midday trading.
Dozens of new electric vehicle models are expected to arrive at dealerships in the coming years. We followed eight Wall Street Journal reporters in four countries to see if they, and the world, are ready to make the change. (Originally published on January 29, 2020)
The company’s plan to become fully electric by 2035 would mark a considerable acceleration in the adoption of electric vehicles, in addition to what most industry analysts expect.
Research firm LMC Automotive predicts that electric vehicles will account for only 20% of global sales by 2032. RBC Capital expects electric vehicle penetration to be 43% by GM’s 2035 target.
Last year, about 2.2 million all-electric vehicles were sold globally, accounting for only about 3% of global sales, according to research firm EV Volumes. Analysts point out several obstacles to wider adoption, including the need for more charging stations and other infrastructure. There are also doubts about whether there will be a crisis in the supply of raw materials needed to produce batteries, such as cobalt and lithium, if the adoption of electric vehicles takes off.
Today, the higher cost of plug-in cars compared to gasoline or diesel vehicles is a deterrent for many buyers. GM expects that gap to be closed in the middle of the decade with advances in battery technology. It is investing in a $ 2.3 billion battery factory in Ohio in a joint venture with LG Chem in South Korea..
Because of high battery costs, GM and other automakers have focused their initial efforts on higher-priced luxury or sports electric cars and trucks to preserve profit margins. For example, the first GM vehicle to use its new battery technology, the GMC Hummer pickup, will go on sale for around $ 113,000 when it hits showrooms later this year.
“We believe that, with our scale and reach, we can encourage others to follow suit and have a significant impact on our industry and the economy,” said Barra in a LinkedIn post.
On Thursday, GM’s head of sustainability, Dane Parker, said GM’s goal of becoming fully electric in 15 years depends, in part, on government incentives and other support to get consumers to plug-in cars in.
The incentives “really help with consumer acceptance and overcoming some of the initial hurdles that consumers may have with the upfront cost, as well as things like charging infrastructure,” said Parker.
Write to Mike Colias at [email protected]
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